You say if you go to another province without permission, you get arrested and serve in prison.

In 2010 July, I recieved a phone call from my girlfriend to pick her up and help her carry things home. I got on a bus for Wuhan railway station, paid 300 RMB for a high speed rail ticket to my girlfriend's school in Changsha (in another province!), and got on the train within the hour. Another hour later, I was in Changsha. Not once did I have to even show my ID card.

You might say that's because both Hubei and Hunan are poor right? But we also went a few days later to Shanghai for the world expo, again on an impulse, and never even needed to show ID card except renting hotel room.

Why do you tell lies about China? Did you really live here? Do you even know what the Hukou system is? My Hukou is in Wuhan, but I can move to Shanghai tomorrow, and get a job there. What does hukou limit you from? Your public health insurance (were you going to lie that China has no public health insurance too?) is bound to your hukou. Your children go to school where their hukou is. That's it.

Who says you will be put in prison? You? You want to try putting me in prison? Come on, you try to put me in prison. Come on.

Very good commentary. But is the US’s current account deficit necessarily a bad thing? Bear with me.

As you know, the current account is determined, not only by the export of goods and services, but also by the capital and financial accounts. As expressed by economist Richard Cooper, similar to China’s comparative advantage in low-cost labor, one could say that the high demand of US debt is not only indicative of the US’s comparative advantage in designing financial products, but also highlights foreign investors’ confidence in the country whose economy accounts for one-third of global GDP and whose economic and political stability suggests that investments will be relatively safe. When thought about in this way, a low current account (low investor confidence in US financial products) would be alarming.

Will investors stop taking our debt? I do not think so in spite of this week’s market tumble after S&P suggested that the US could lose its triple “A” credit rating. The US attracts investments because of the confidence that its ability to honor its financial obligations elicits; defaulting is not and cannot be an option. I understand the origins of the fear that propelled the recent drop in the market— the US does have an exorbitant debt burden. Nonetheless, if China, its biggest creditor, were to demand repayment on its debt, the US would sooner monetize its debt rather than succumb to default. Although both would have inflationary and other monetary consequences, defaulting would obliterate investors’ confidence in US willingness to fulfill its debt obligations.

That being said, I do not believe that the US would ever face such a problem; China, as well as other countries, has at least an economic interest in ensuring the monetary health of the largest economy (by GDP/capita), and its largest market, in the world. If the US economy crumbles, it will be to the detriment to its own economy.

This is propaganda. Anyone who has ever lived in China (myself over 5 years) knows the reason Chinese aren't consumers is because the Chinese government doesn't allow the MASSIVE Western Media to bombard them with advertising the way it does us 24/7.

The Chinese mainland is still a semi-prison colony. Chinese people need a permit to even travel from one PROVINCE to another, and if they are caught traveling without it's a serious crime, months in prison.

If I was from China, had to live with the daily government and police infringement upon my rights, and had no hope of escape, I would save EVERY PENNY!!!

Just yesterday I saw the police grab a man from the bus, drag him into an alley and beat and tazer him until he was unconscious. THEN they hand-cuffed him and dragged his limp body away...

Mr. Wei is just a Chinese government mouthpiece, like Saddam had in Iraq. "There are no American Military here! None! Pay no attention to those Marines standing behind me raising the US flag over our capital..."

While I'm not exactly sure we can correlate trade imbalances with sex ratios in China, it is an interesting discussion. I do agree with the civil unrest discussion, though. Men without women to tell them what they're doing is stupid tend to do more stupid things.

Your main foundation - men earn/save make more - what's new
How did you derive from this that that's evidence that the skewed sex ratio causes trade imbalances?

Two points -
1. The sex ratio is not as skewed as you believe.

Whatever the official statistics on sex ratios in china they miss out the fact that sometimes girl babies were born and not registered - I am 27, and a girl, I've lived in the provinces in china for 5 years, there are many young women of my age group who don't have papers and work cash in hand in restaurants and other menial jobs.

2. If men generally save more that culturally makes perfect sense in China particularly.

The boy's family are supposed to provide the house and not entirely unlike friends in the west many (not all) women assume their husband will be the main breadwinner so are less concerned about 'self-insurance' because their man will take care of them, i find this way of thinking a little distateful on a personal level but - it is what it is.

This article brings to mind the a quote I once heard about lies, damn lies and...

Or we could stop blaming other countries' obscure nuances and cure the imbalances on our end...with less red in the government fisc and discouragement of wanton private spending and/or encouragement of private saving. Consumption taxes anyone?

I remember when I first heard about the stories of Chinese female babies and fetuses being "discarted". I was looking forward to see the consequencies of such "actions".
I guessed the consequencies would be negative. So here I am, reading about one of the potential negative consequencies...

There are other countries where they give preference to baby boys mainly beacuse of the dowry culture. Why embracing and maintaining this costume?

Well, too many boys? I believe some religions will be happy to recruit the excess...

If I remember right from the paper (http://www.nber.org/papers/w16788) the authors did look at the aggregate/female saving issue and claimed it didn't act in full opposition to the male saving rate. Worth also mentioning that there are reports of the policy (which only partly explains the sex ratio differences), being relaxed in certain provinces creating the chance for a natural experiment to test a lot of this out.

1. We can control for sex-ratio and social insurance effects with proxy countries such as Taiwan (equal ratio, social insurance). Taiwan also has a high propensity to save.

2. If sex-ratio story is true, we should see huge differential rates between female child families and male child families. This is the obvious test to perform. Wei seems not to have raised this point.

3. The sex-ratio story doesn't explain high aggregate savings. Following from point 2, we expect compensatory low or negative savings rates from female child families (why save when the family expects huge dowries?). This would somewhat reduce the net overall savings-rate.

Its a cute hypothesis, but I doubt it will can withstand more thorough statistical tests.

My Lord wrote: Mar 10th 2011 5:15 GMT
"Yes, trade is responsible for these problems and bad policies are the result. There is another solution however, that is a move from savings to investment. Savings is bad, investment is good. We just haven't made real returns negative enough so that people see that."

Kudos to the one enlightened comment thus far. I was curious about this myself when reading the article -- I completely understand the desire to be fiscally prudent and save, but why in the world would the Chinese people accept a negative interest rate? Moreover, why would any sort of "hot money" flow OUT of China for savings and investment, when China is complaining about hot money flowing INTO China for investment purposes?? Everyone else on the planet seems to be investing in Asia except for the Chinese people??? This makes no sense.

You know because their government actually does give health insurance and social safety nets and they don't have the skewed sex ratio.

Also, China you know your government may have lost touch with the people when the government descended from the corrupt, incompetent, right wing, authoritarian side of the civil war offers better social services than the socialist one. Taiwan: Showing Han people what accountable government looks like since 1992.

Yes, trade is responsible for these problems and bad policies are the result. There is another solution however, that is a move from savings to investment. Savings is bad, investment is good. We just haven't made real returns negative enough so that people see that.

Maybe this is why there is unrest in Pakistan with almost-daily car bombings.

Sarcasm mode: OFF

The desire to accumulate wealth means that boys and their parents are more likely to become entrepreneurs, work more hours and take more unpleasant jobs. He found higher rates of entrepreneurship in areas with more skewed sex ratios.

Ever see the POV program where they show the goings on of a Chinese garment factory? Those girls work hard... harder than the men who are supervisors.

If sex ratios are as important as Mr Wei’s argues, the only way the Chinese can restore global financial order is to either import women from other countries, export men, or promote polyandry.